Are VLS Finance latest results good or bad?

VLS Finance's latest financial results for the quarter ended September 2025 reveal significant operational challenges. The company experienced a substantial year-on-year revenue decline of 86.70%, dropping to ₹10.53 crores from ₹79.18 crores in the same quarter of the previous year. This dramatic contraction raises concerns about the sustainability of its business model. Additionally, net profit fell by 86.11% to ₹7.10 crores, indicating severe profitability issues.
Despite these challenges, VLS Finance managed to maintain a relatively healthy profit margin of 67.88%, which is an increase from the previous year. However, this improvement in margin appears to be more a result of cost management rather than a reflection of strong operational performance. The company's operating profit margin, excluding other income, decreased significantly, highlighting ongoing difficulties in generating revenue.

The return on equity (ROE) stands at a low 1.87%, which is below acceptable levels for financial services companies, further emphasizing the company's struggles with capital efficiency. The five-year average ROE of 7.37% also suggests persistent issues in deploying capital effectively.

VLS Finance's dependency on other income for profitability is concerning, as 42.49% of profit before tax came from this source, indicating a lack of sustainable operational earnings. Furthermore, the company has underperformed compared to the broader non-banking financial company (NBFC) sector, which has shown resilience, with VLS Finance declining significantly over the past year.

The company has seen an adjustment in its evaluation, reflecting the negative trends in its financial performance. Overall, VLS Finance's results indicate a critical need for strategic reassessment to address its fundamental business challenges and improve its financial health.